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Tuesday, October 15, 2002

Glimmer of Turnaround: Why the Ad Market Recovery Matters

Gannett's Profit Jumps 52% on Strong Television Ad Sales. The Gannett Company said Tuesday that its third-quarter profit increased 52 percent as advertising sales at its television stations rose and costs fell. By Bloomberg News. [New York Times: Business]  This follows on the heels of Yahoo announcing great ad sales numbers (bolstered by Yahoo's Overture economy) and Rupert Murdoch touting an ad recovery.

If the ad market does indeed recover, its important for two reasons:

1.  Ad Spending correlates with GDP

2. Advertising Drives the "Multimedia Cycle"

Just as potential customer spending drives advertising expendtitures, Ad spending drives the development of content to create ad space.  Development of content drives spending telecommunications services to delivery it.  Development of telecommunications services requires investment in applications and infrastructure.

In other words, the strength of the advertising market reflects percieved strength of consumer markets and drives capital spending in a significant portion of the telecommunications sector. 

9:42:06 PM    comment []

Industrial Revolution vs. Information Revolution

The West Coast labor dispute has centered on the issue of the "free flow of information" -- perhaps the most tangible clash of the industrial and information revolutions.  Carriers now offer a direct service model (think Dell or Cisco for shipping capacity), where customers perform scheduling and service tasks that longshore clerks traditionally play a part in.  This value chain shift not only reduces carrier costs, but enables just-in-time inventory practices for their customers -- creating value several-fold greater than supposedly lost jobs.  Settle dammit. 

O'Neill: Port Closure Impact Not Known. DES MOINES, (Reuters) - U.S. Treasury Secretary Paul O'Neill said on Monday the full impact of a 10-day shutdown in West Coast ports is not yet clear, but that by some estimates, the lock-out cost the economy some $2 billion a day. [New York Times: Business]

10:01:41 AM    comment []

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